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1 THE MAGAZINE OF THE LOS ANGELES COUNTY BAR ASSOCIATION 2016 Guide to INVESTIGATIVE SERVICES JULY/AUGUST 2016 / $5 EARN MCLE CREDIT PLUS BRAND PROTECTION page 26 INVOLUNTARY BANKRUPTCY page 32 On Direct: Ralph M. Terrazas page 8 PATIENT DUMPING page 20 Surrogacy for Same-Sex Couples page 12 Renewing our Mission Los Angeles lawyer Margaret P. Stevens is the president of the Los Angeles County Bar Association page 7

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5 F E AT U R E S 20 A Shameful Practice BY WILL JAY PIRKEY The L.A. City Attorney's Office asserts claims under Unfair Competition Laws to enforce patient dumping ordinances 26 Fashion Sense BY LARRY C. RUSS AND NATHAN D. MEYER Although the law of brand protection has been stable in recent years, a case before the U.S. Supreme Court may alter the doctrine of secondary meaning Plus: Earn MCLE credit. MCLE Test No. 259 appears on page Forcing the Issue BY ASA S. HAMI Creditors considering an involuntary bankruptcy petition should first consider the risks and benefits 38 Special Section 2016 Semiannual Guide to Investigative Services Los Angeles Lawyer the magazine of the Los Angeles County Bar Association July/August 2016 Volume 39, No. 5 COVER PHOTO: TOM KELLER LOS ANGELES LAWYER (ISSN ) is published monthly, except for a combined issue in July/August, by the Los Angeles County Bar Association, 1055 West 7th Street, Suite 2700, Los Angeles, CA (213) Period - icals postage paid at Los Angeles, CA and additional mailing offices. Annual subscription price of $14 included in the Association membership dues. Nonmember subscriptions: $38 annually; single copy price: $5 plus handling. Address changes must be submitted six weeks in advance of next issue date. POSTMASTER: Address Service Requested. Send address changes to Los Angeles Lawyer, P. O. Box 55020, Los Angeles CA DEPARTM E NTS 7 President s Page Renewing LACBA s mission to the community BY MARGARET P. STEVENS 8 On Direct Ralph M. Terrazas INTERVIEW BY DEBORAH KELLY 10 Barristers Tips The advantages of being a member of the Barristers Section of LACBA BY DAMON A. THAYER 12 Practice Tips Reviewing the legal issues that affect surrogacy for same-sex couples BY EVIE JEANG 16 Practice Tips Evaluating the effectiveness of the inter partes review process BY NATE DILGER AND JOHN LORD 51 Index to Advertisers 52 Closing Argument Reflections on current choices for legal career paths BY MARK SONNENKLAR

6 VISIT US ON THE INTERNET AT CAN BE SENT TO EDITORIAL BOARD Chair TED M. HANDEL Articles Coordinator JOHN C. KEITH Assistant Articles Coordinator SANDRA MENDELL Secretary TYNA ORREN Immediate Past Chair DONNA FORD JERROLD ABELES (PAST CHAIR) ETHEL W. BENNETT SCOTT BOYER CHAD C. COOMBS (PAST CHAIR) HON. MICHELLE WILLIAMS COURT GORDON K. ENG STUART R. FRAENKEL MICHAEL A. GEIBELSON (PAST CHAIR) CHRISTINE D. GILLE SHARON GLANCZ STEVEN HECHT (PAST CHAIR) DENNIS HERNANDEZ MARY E. KELLY (PAST CHAIR) ERIC KINGSLEY KATHERINE KINSEY DANIELLE LACKEY JENNIFER W. LELAND PAUL S. MARKS (PAST CHAIR) COMM R ELIZABETH MUNISOGLU PAUL OBICO CARMELA PAGAY DENNIS L. PEREZ (PAST CHAIR) GREGG A. RAPOPORT GARY RASKIN (PAST CHAIR) JACQUELINE M. REAL-SALAS (PAST CHAIR) THOMAS H. VIDAL STAFF Editor ERIC HOWARD Art Director LES SECHLER Director of Design and Production PATRICE HUGHES Advertising Director LINDA BEKAS Administrative Coordinator MATTY JALLOW BABY Copyright 2016 by the Los Angeles County Bar Association. All rights reserved. Reproduction in whole or in part without permission is pro - hibited. Printed by R. R. Donnelley, Liberty, MO. Member Business Publications Audit of Circulation (BPA). The opinions and positions stated in signed material are those of the authors and not by the fact of publication necessarily those of the Association or its members. All manuscripts are carefully considered by the Editorial Board. Letters to the editor are subject to editing. 4 Los Angeles Lawyer July/August 2016

7 LOS ANGELES LAWYER IS THE OFFICIAL PUBLICATION OF THE LOS ANGELES COUNTY BAR ASSOCIATION 1055 West 7th Street, Suite 2700, Los Angeles CA Telephone / LACBA EXECUTIVE COMMITTEE President MARGARET P. STEVENS President-Elect MICHAEL E. MEYER Senior Vice President PHILIP H. LAM Vice President TAMILA C. JENSEN Treasurer DUNCAN W. CRABTREE-IRELAND Assistant Vice President SARAH E. LUPPEN FOWLER Assistant Vice President ANNALUISA PADILLA Assistant Vice President ROXANNE M. WILSON Immediate Past President PAUL R. KIESEL Barristers President DAMON A. THAYER Barristers President-Elect MARIANA ARODITIS Chief Executive Officer/Secretary SALLY SUCHIL Chief Financial & Administrative Officer BRUCE BERRA General Counsel & Chief Administrative Officer W. CLARK BROWN BOARD OF TRUSTEES RONALD F. BROT HARRY W.R. CHAMBERLAIN NATASHA R. CHESLER REBECCA A. DELFINO KENNETH C. FELDMAN JO-ANN W. GRACE JOHN F. HARTIGAN MARY E. KELLY LAVONNE D. LAWSON RICHARD LEWIS F. FAYE NIA BRADLEY S. PAULEY ANGELA REDDOCK DIANA K. RODGERS MARC L. SALLUS EDWIN C. SUMMERS III DAVID W. SWIFT WILLIAM L. WINSLOW AFFILIATED BAR ASSOCIATIONS BEVERLY HILLS BAR ASSOCIATION CENTURY CITY BAR ASSOCIATION CONSUMER ATTORNEYS ASSOCIATION OF LOS ANGELES CULVER MARINA BAR ASSOCIATION GLENDALE BAR ASSOCIATION IRANIAN AMERICAN LAWYERS ASSOCIATION ITALIAN AMERICAN LAWYERS ASSOCIATION JAPANESE AMERICAN BAR ASSOCIATION JOHN M. LANGSTON BAR ASSOCIATION LESBIAN AND GAY LAWYERS ASSOCIATION OF LOS ANGELES MEXICAN AMERICAN BAR ASSOCIATION PASADENA BAR ASSOCIATION SAN FERNANDO VALLEY BAR ASSOCIATION SANTA MONICA BAR ASSOCIATION SOUTH BAY BAR ASSOCIATION SOUTHEAST DISTRICT BAR ASSOCIATION SOUTHERN CALIFORNIA CHINESE LAWYERS ASSOCIATION WOMEN LAWYERS ASSOCIATION OF LOS ANGELES Los Angeles Lawyer July/August

8 Zikhrono livrakha, or simply z l, ( May his memory be for a blessing ) is an honorific in Hebrew that Jews traditionally use to convey respect for a deceased family member or noteworthy person. The phrase appears to originate from Proverbs, in which it is said that the memory of the righteous shall be for a blessing, but the name of the wicked shall not. The hope is that recollections of the deceased will guide those who knew the person to live better lives in the future. In the three years since Sam Lipsman passed away, his memory remains a blessing to me. During the time I served on the editorial board and Sam was LACBA s director of publications, he contributed immeasurably to honing the writing skills that I had first developed at USC s journalism school. Sam s knowledge of the substantive law was deep and covered a broad spectrum. He also could foresee legal trends. Armed with this knowledge and a sharp wit, together with a talented publishing staff and a committed editorial board, Sam transformed the magazine into an essential reference tool for attorneys and judges. Sam s death left a void at Los Angeles Lawyer that needed to be filled. Eric Howard, with the support of the editorial board and the resources provided by LACBA, stepped in during this difficult transition. Eric has admirably preserved the magazine s editorial standards and sustained its well-regarded value to LACBA members. Over the upcoming year, the challenge that all of us who are associated with the magazine will face is not just maintaining these principles. Rather, it will be keeping Los Angeles Lawyer a relevant and reliable source of legal information at a time when there are so many online resources and physical treatises and texts competing for the attention of attorneys. In my view, as the incoming chair of the editorial board, meeting this challenge will involve, among other things, rekindling a sense of energy and involvement among the board members. During Sam s tenure, board meetings were often characterized by a serious but equally freewheeling and sometimes irreverent discussion. In this give-and-take, Sam and the members would critique the substantive and editorial content of articles that had been published or were about to be published and identify ways in which content could be improved. The magazine also benefitted from the significant time that the board set aside at each meeting to discuss new court rulings and statutes. This practice will be resumed this year. The board and editorial staff can certainly make great strides in meeting this challenge, but the support of LACBA members is crucial to the success of this endeavor as well. This support can be as simple as sending an to Eric Howard at lalawyer@lacba.org with a legal issue that you believe should be covered by the magazine, and perhaps a suggested author. It can also follow the time-honored tradition of members submitting unsolicited articles, which also can be sent to Eric. And if you have other suggestions for enhancing the content and relevance of the publication, please send those along. To borrow from the standard pitch of pilots and flight attendants at the end of every flight, we know that you have many resources available to support your legal practices. We are committed to preserving the editorial legacy of Sam Lipsman and retaining Los Angeles Lawyer s place as the resource that comes to mind first when searching for a legal argument or identifying issues to be addressed with a client matter. n Ted M. Handel is a real estate and corporate transactional attorney with Valensi Rose, PLC, and is the chair of the Los Angeles Lawyer Editorial Board. His practice covers the acquisition, financing, leasing, and construction of commercial developments and affordable housing projects, and formation of nonprofit and for-profit entities. 6 Los Angeles Lawyer July/August 2016

9 president s page BY MARGARET P. STEVENS Renewing LACBA s Mission to the Community AFTER ALMOST 140 YEARS, now what? Is LACBA's mission still relevant? Or do our members need something different from our organiz - ation? The last two decades have seen unprecedented changes. When I first started practicing law, I was the only attorney at my firm to have a computer my own. I had learned to use one because I couldn t have survived without one, working full-time while attending Loyola Law School s evening program. The secretaries felt threatened because I did my own edits. The partners were unnerved and weren t quite sure what I was doing in my office. The other associates just stared. I was not allowed to use to communicate with opposing counsel. There was no computer network documents moved around on floppy disks. The legal community was smaller, or at least it felt smaller larger than a decade or two before, but still small enough that you probably knew your opposing counsel, or could make one or two calls for some background. Today, we don t call; we send an to our colleagues or ask Google. We also don t talk to each other as much even if we have the time, we often rely on impersonal . Another thing has changed. When I first started practicing law, we had a billing code for bar activities, because participating in the organized bar was valued and indeed often taken for granted. While there are firms that continue to value bar participation, our profession has transformed into a business in which benchmarks generally do not allow for it. Also, there was a concept of professional courtesy and civility, the idea that you could become friends with your opposing counsel while zealously advocating for your client and undermining the opposition at every step. However, this culture of professionalism and public participation had actually been eroding for a while, and business as usual ended for good with the great recession of Predictions about our personal and professional lives have become difficult to make as we see the disappearance or merger of prominent businesses and law firms. Our ability to communicate has also eroded, compromised by the ever-increasing coarseness of public discourse in every arena. In this changed world, one might wonder whether bar organizations like ours are a dying breed. That s certainly the conventional wisdom. But it isn t so, at least not for LACBA. If it were, why does LACBA still present 300 in-person events each year? Why do we have 26 sections and 19 committees that regularly meet in person to accomplish their goals? Why do 500 new lawyers show up at the New Admittee Reception? Why do our five pro bono projects attract hundreds of volunteers that have assisted more than 18,000 people, provided more than $3.7 million in pro bono services, and primarily through Counsel for Justice s efforts raised more than a half million dollars in donations last year? I suggest that it shows that a sense of community and contribution is what lawyers need now more than ever. So, LACBA has survived, and survived well. But how will we not only survive, but also thrive? By working together. We will have differing views on how to thrive. This difference of opinion has generated the first contested election for trustee and officer positions since However the election turns out, we will still need to work together to answer the question, how will we thrive? We will need to bring to the table not only our divergent points of view but also a willingness to listen to one another. As Madeline Albright recently noted to a 2016 graduating class: The great divide in the world today is between people who have the courage to listen LACBA has survived, and survived well. But how will we not only survive but also thrive? By working together. and those who are convinced that they already know it all. Some issues, for example LACBA s continued support for court funding and inviting newer lawyers to connect with our sections, will likely garner unanimous support. Other issues may take some work: how to allocate and plan for the rising costs of presenting CLE programs and events, whether we can provide more online support and resources for our members, and whether we should expand our pro bono projects to meet the desperate needs of our greater community. This is where we will, as we have done before time and time again, define ourselves and LACBA as leaders in our community. We can start by focusing on one sentence LACBA s mission statement. It s simple, but powerful: The mission of the Los Angeles County Bar Association is to meet the professional needs of Los Angeles lawyers and advance the administration of justice. Only by focusing on our mission can we begin to take the steps together towards a future that will serve our members and our community. In taking my first steps as president, I am establishing two task forces on our board of trustees: one to address the sections concerns about cost allocation and event coordination that have been a part of the dialogue for this past year, and a second to listen to our newer lawyers on how they can access the extraordinary resources that LACBA, and particularly its sections, can offer to succeed in today s profession. I welcome the thoughtful input many of you have given me that is born of years of experience as well as the enthusiastic, visionary ideas of our newest members. Please continue this dialogue with me during this exciting time in LACBA s history and future. n The president of LACBA, Margaret P. Stevens, is managing partner at Daehnke Stevens LLP. Her practice focuses on employment and consumer fraud class actions, product liability, employment/discrimination, business and corporate litigation, and personal injury. Los Angeles Lawyer July/August

10 on direct INTERVIEW BY DEBORAH KELLY Ralph M. Terrazas Fire Chief of Los Angeles Fire Department RALPH M. TERRAZAS A 31-year veteran of LAFD, Chief Terrazas was formerly assistant fire chief over the South Division, which cov ers half the city, and established LAFD s Pro - fessional Standards Division. What is the perfect day? A day when we get things done. You have been Chief of Los Angeles Fire Department for approximately two years. What are your major job duties? Our mission is to protect life and property. There is a lot to make that happen. There are labor relations, the budget, and political issues that arise. Does LAFD have a philosophy? Hit it hard and hit it fast. LAFD budget is $626 million. How does that compare to past budgets? This is a record setting, all-time high for our department. Back in 2011, we were in the low fives and had to close 17 companies. We did not hire for five years. Are you hiring now? We had 13,000 applicants for 350 jobs. What is your response time? Our average response time is excellent approximately six minutes. We have internally developed a better model to dispatch our resources. Our call load has gone up 14 percent, and I am proud that we have maintained our response time. Drought conditions mean a higher fire risk. What is the best thing a homeowner can do? Within the city, we have very stringent brush control ordinances. You have to have all your vegetation trimmed 200 feet away from your house. You have 3200 fire fighters, and the starting salary is $60,552. Who is a typical applicant? A college graduate who is an EMT or paramedic, a graduate from a fire academy, and who is physically fit. What does the written test consist of? Four hours at a testing center by a private vendor. Previous tests had an adverse impact on women, African Americans, and Latinos. I wanted a test with an even playing field. The physical ability test (CPAT) is a timed pass or fail test with eight separate events. Which is the hardest part? Dragging a 150-pound dummy. What percentage of applicants pass the CPAT? 91 percent. What are you looking for in the oral test? To get a feeling for the person and whether he or she has good common sense. LAFD has 106 neighborhood fire stations that cover 470 square miles. What kind of fire is the hardest to contain? We had a wharf fire that took a day and a half. It was heavy timber that had been covered with asphalt. Previously, those kinds of fires burned until there was no more fuel. We had to take drastic measures; the smoke was toxic. Which is the busiest fire station? Skid Row has the busiest station west of the Mississippi. Last calendar year, they ran over 17,000 calls. Are most fires avoidable? Yes. The best resource for a homeowner or renter is a smoke alarm. Last year, we had eleven fire fatalities within the city of Los Angeles, with a population of over four million. It was our all-time low. What percentage do you think are arson? It s not common, but there are significant exceptions for example, the 2014 Da Vinci fire. That was a $100 million loss. LAFD describes a fire fighting job as most physically demanding. How do fire fighters maintain their health? Most work out off and on duty. With a fire, you don t get the time to take a break. Firefighters wear a 50-pound self-contained breathing apparatus. Any other heavy equipment? Yes, assorted tools when you re running from the fire engine. LAFD has been accused of bias in their hiring practices. What safeguards are now in place? I am very proud of our diversity. The one area we need to do better is in female recruitment. The biggest barrier has been the physical test. That is why we are targeting women in the military and collegiate female athletic teams. LAFD had paid out millions in discrimination lawsuits. Any improvement? Our Professional Standards Unit was created in At our all-time high, the city paid out over $18 million. Subsequent to 2008, we have had zero litigation because of EEO issues. You have been with LAFD since Why did you choose this profession? In the third grade, I vividly remember the firefighters coming to school and showing their equipment. They let me shoot some water and I was hooked. What did it feel like walking into your first burning room? Adrenaline rush. You graduated with a B.A. in Public Administration. Did that prepare you for being chief? It did. The baseline is that you have to have fitness as well as academic preparation. You hold a U.S. patent for a brush fire rate-ofspread tool. What is that? It s a way of calculating how fast the brush fire will move. I 8 Los Angeles Lawyer July/August 2016

11 was tasked with a project on how to figure this out; I went back 30 years. The patent is city property. What was your best job? This job. I get great satisfaction from the things that we are accomplishing. I ran a relay race with a man that our paramedics brought back from death last year. What was your worst job? I worked in a lumber yard where my uncle was a foreman. He offered me a permanent job for $400 a week. There s nothing wrong with building lumber loads, but I did not want to do that for the rest of my life. What characteristic do you most admire in your mother? She s adventurous. If you were handed $10 million tomorrow, what would you do with it? I would set up my kids with the ability to buy a house. I would donate a portion to charity, and go on a trip with the family. Everything I want, I already have. Who is on your music play list? The Eagles, ever since Glenn Frey passed. What book is on your nightstand? It s Your Ship by Abrashoff a great leadership book. What do you do on a three-day weekend? I jog, play golf, work around the house, and enjoy family activities. What are your retirement plans? None. If your house were on fire, what would you take on your way out? Whoever is in, is coming out with me. How do you get your news? I have downloaded all the links for the Los Angeles Times and multiple magazines onto my ipad. I think that s the most efficient way. LAFD is active on Twitter. For what purpose? Public safety messages, recruitment, our stories. We also use Instagram and Facebook. Now, we are looking at Snapchat. What are the three changes you would like to see in the world? I ll tailor it to LA: less violence, stronger regulations to protect the environment, and people being positive role models for children. Who are your two favorite presidents? President Obama for the Affordable Care Act that alone has caused me to have great admiration for him. FDR that was a challenging time for the world. What is the one word you would like on your tombstone? Game changer. Los Angeles Lawyer July/August

12 barristers tips BY DAMON A. THAYER The Advantages of Being a Member of the Barristers Section of LACBA AS THE INCOMING PRESIDENT OF THE Los Angeles County Bar Association Barristers, I have the distinct privilege to write about who we are and what we do, and to invite new and young attorneys to join our dynamic group. Although Barristers has been active in the Los Angeles legal scene for over 85 years, I still get asked the question Who or what are the Barristers? In all honesty, I asked the same question years ago when I was finishing an out-of-state clerkship and looking to move into private practice in Los Angeles. While I knew I wanted to get involved in the local legal community and start building my professional network, I wasn t sure where to begin since the Southland is home to hundreds of bar associations and other professional groups. For me, joining Barristers ended up being a no-brainer. Barristers is the only group in Los Angeles focused exclusively on the needs of new and young attorneys that has the backing and name recognition of one of the largest bar associations in the United States with nearly 24,000 members. At almost 5,000 members, Barristers is unique as it includes at torneys practicing in every area of the law as well as holders of JDs working in the business, entertainment, and political worlds. Our membership includes attorneys at big, midsize, small, and boutique firms as well as solo practitioners, those in government service and who serve the public interest, teach, work as in-house corporate counsel, and various others. A core mission of Barristers is to create meaningful opportunities for new lawyers to make connections that they might not otherwise have a chance to make. Barristers hosts several networking functions every year allowing our members to meet each other, as well as potential clients, referral sources, other young professionals, and other members of the Los Angeles legal community. We recognize that knowing the right person can put a resume on the top of the pile and open the door for an interview or provide inroads to landing a client or generating business. We also know that sometimes new attorneys just need a chance to blow off steam and commiserate with peers about the 11:59 P.M. summary-judgment filing that almost did not happen or the partner who inexplicably insists on following the outdated twelfth edition of The Bluebook. By the way, did I mention that cocktails at Barristers networking functions are often free? Another focus of Barristers is hosting events in which new lawyers can meet judges, elected officials, and other heads of government. Our flagship bench-and-bar mixer gives members the rare opportunity to mingle with esteemed members of the judiciary in an informal setting. Barristers also hosts other types of events that have featured numerous federal and state court judges, Los Angeles Mayor Eric Garcetti, U.S. Attorney Andre Birotte, Senator Ben Allen, California State Treasurer John Chiang, Chief Deputy City Attorney Jim Clark, and Los Angeles County Sheriff Jim McDonnell. Our very popular Dinner with a Leader series provides new attorneys an intimate forum to engage prominent leaders over matters of public policy and the law, and, yes, dinner and drinks are included. For attorneys seeking pro bono opportunities and other ways to give back to the community, Barristers also has that covered. We provide pro bono training and volunteer opportunities involving a diverse array of client groups, including immigrants, domestic violence victims, and veterans. For those looking for ways to get involved outside the legal community, Barristers has previously organized teams for the annual Los Angeles AIDS Walk, spoken to local high school students about constitutional matters, and organized various other community service-oriented events. It doesn t take a crystal ball to see that the leaders of Barristers today will be future leaders of the Los Angeles legal community. As Barristers, we were all law students not so long ago and have not forgotten the value and perspective that speaking with newly minted lawyers can provide. To help the next generation of lawyers, Barristers works with local law schools through a mock interview program. We also provide networking and mentorship opportunities. One of the final objectives of Barristers is to provide top-notch CLE programming covering hot topics and programs designed to help new attorneys refine their professional skills. Our CLE programs from this past year featured well-known names in the legal community addressing fundamental subjects such as how to litigate your first high-profile case and what to expect at your first trial. Want to get involved? Of course you do! Any attorney is eligible for Barristers membership who is either 36 years old or younger or who has been admitted to practice for five years or less. Getting involved in Barristers can take many forms, including joining a committee, helping organize (or simply attending) our programs and events, or submitting an article relevant to new attorneys for publication. For those wanting to take on a larger role in Barristers, we invite you to apply to be a member of our executive committee or to serve as liaison to the executive committee of one of LACBA s other sections. It doesn t take a crystal ball to see that the leaders of Barristers today will be future leaders of the Los Angeles legal community. Looking back at our not-too-distant past, former leaders of Barristers went on to become federal and state judges, prominent partners at Los Angeles s best law firms, in-house counsel at some of Southern California s most highly regarded companies, high-ranking government officials, and much more. We invite you to become a part of this proud tradition. n Damon A. Thayer, the President of the Barristers, is an attorney at Shoreline, A Law Corporation, where he focuses on general business liti gation. 10 Los Angeles Lawyer July/August 2016

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14 practice tips BY EVIE JEANG Reviewing the Legal Issues That Affect Surrgogacy for Same-Sex Couples RICHARD EWING THE U.S. SUPREME COURT S recent landmark decision, Obergefell v. Hodges, 1 legalized same-sex marriage across the United States. Regardless of sexual orientation, all couples now have the right to marry. However, for many, the right to marry is not complete without the right to have children. As such, many same-sex couples turn to surrogacy or adoption as a means to begin their families. Surrogacy is the carrying of a pregnancy for intended parents. In a traditional surrogacy, the host is genetically related to the child, while in a gestational surrogacy the host is not genetically related to the child. Surrogacy is particularly ideal for couples for whom pregnancy would be risky or medically impossible. Also, it can assure couples that their genes will be handed down to their child. In adoption, the adoptive parents are genetically unrelated to the adoptee, unless the adoptee is a blood relative of one of the adoptive parents. Another distinct advantage of surrogacy is that the intended parents can make the decision to bring a child into the world and are thus more involved in the procreation process. Essentially, surrogacy is a form of assisted reproduction; accordingly, a surrogacy contract is an assisted reproduction agreement. California Family Code Section 7606 defines assisted reproduction as conception by any means other than sexual intercourse. Section 7962 of the Family Code requires that both the intended parents and surrogate seek separate independent counsel before entering into a gestational surrogacy agreement. Surrogacy policies and laws vary from state to state. Same-sex couples considering surrogacy may also look outside of the United States for a surrogacy arrangement. In the United States, a surrogacy arrangement can cost up to $100, This price drives many couples to look abroad for more affordable options. India and Russia, where a typical surrogacy arrangement costs approximately $40,000, are popular choices. 3 However, same-sex marriage still is not universally recognized. For instance, India and Russia prohibit same-sex marriage. In fact, in both countries same-sex marriages are punishable by incarceration. 4 Therefore, many same-sex couples may have only the United States as an option for surrogacy. Although there is limited data and reporting on the number of surrogacies in the United States, the Council for Responsible Genetics previously reported that the number of gestational surrogacies increased 89 percent in just four years, from 2004 to While gestational surrogacy in the United States has become relatively commonplace, case law offers examples of the pitfalls that may result. The possibility of third-party reproduction garnered wide attention when Baby M was born. In 1984, in New Jersey, William and Elizabeth Stern entered into a traditional surrogacy agreement with Mary Beth Whitehead. 6 At the time, gestational surrogacy was not widely available. Mr. and Mrs. Stern reportedly based their selection of Ms. Whitehead as the surrogate by looking at her picture. Pursuant to the agreement, Ms. Whitehead was inseminated with Mr. Stern s sperm, brought the pregnancy to term, and was to terminate her parental rights in favor of Mrs. Stern. 7 However, when Baby M was born, Ms. Whitehead changed her mind. 8 In 1988, the Supreme Court of New Jersey ruled that surrogacy contracts are contrary to existing statutes and public policy. 9 New Jersey has a strong public policy against the sale of a child or sale of a mother s right to her child. 10 Therefore, the Supreme Court of New Jersey ruled that parties cannot contract to change a biological mother s legal status with respect to the surrogate child. Rather, in determining the custody of Baby M, the court used the best interest of the child analysis and awarded the Sterns custody while also giving Ms. Whitehead visitation rights. 11 Although some states followed the New Jersey ruling, other states went a different route. In Johnson v. Calvert, a California court used the Uniform Parentage Act (UPA) of 1973 to resolve a surrogacy dispute. 12 However, the UPA of 1973 was repealed in In 2002, further changes to the UPA were promulgated, and the revision modernized uniform legal guidelines for determining parentage. Under the act, a mother-child relationship can be established either by giving birth or various other means, including by genetic relationship. However, when the genetic and birth relationships reside in different mothers, whichever person has the intent to bring the child into being and to raise it as her own is the mother. 13 In Johnson, because the surrogate mother was not genetically related to the surrogate child, intent was determinative. Evie Jeang practices surrogacy, family law, and workers compensation and has offices in Los Angeles, San Francisco, and New York. 12 Los Angeles Lawyer July/August 2016

15 However, it is not the case that in every instance in which the gestational carrier is not genetically related to the child, intent must be determinative. In the case of In re C.K.G., C.A.G., & C.L.G., the Supreme Court of Tennessee s holding that a gestational carrier was indeed the legal mother of the children to whom she gave birth, was based on the following factors: 1) prior to the children s birth, both the woman as gestator and the man as the genetic father voluntarily demonstrated the bona fide intent that the woman would be the children s legal mother and agreed that she would accept the legal responsibility as well as the rights of parenthood, 2) the woman became pregnant, carried to term, and gave birth to the children as her own, and 3) this case does not involve a controversy between a gestator and a female genetic progenitor in which the genetic and gestative roles have been separated and distributed among two women, nor does it in - volve a controversy between a traditional or ges tational surrogate and a genetically unrelated intended mother. 14 A different result may occur under Cal - ifornia s Family Code Section 3040(d), which provides: In cases where a child has more than two parents, the court shall allocate custody and visitation among the parents based on the best interest of the child, including, but not limited to, addressing the child s need for continuity and stability by preserving established patterns of care and emotional bonds. The court may order that not all parents share legal or physical custody of the child if the court finds that it would not be in the best interest of the child as provided in Sections 3011 and The case is different when the surrogate mother is genetically related to the surrogate child. Generally, the law still views the surrogate mother as the legal mother. In this kind of case, the intended parents must adopt the surrogate child in order to become legal parents. However, In re Marriage of Moschetta, the court ruled a surrogacy agreement is not equivalent to an adoption agreement. 15 Under the adoption statute, Family Code Section 8814, birth parents must specifically consent to an adoption in the presence of a social worker. 16 In K.M. v. E.G., the egg donor, K.M., was the former partner of the gestational mother, E.G. After the relationship ended, K.M. sued to establish parental relationship with E.G. s twin children, conceived through in vitro fertilization. 17 The trial court ruled: By voluntarily signing the ovum donation form, [K.M.] was donating genetic material, her position analogous to that of a sperm donor, who is treat - ed as a legal stranger to a child if he do nates sperm through a licensed physician and surgeon under Family Code section The Court finds no reason to treat ovum donors as having greater claims to parentage than sperm donors. 18 The court of appeal affirmed the judgment, also observing that K.M. s status was consistent with the status of a sperm donor under the UPA. The California Supreme Court, however, reversed the decision, finding that both parties were mothers of the twin children. 19 The court found that Family Code Section 7613(b) did not apply, because the ova were donated to produce children who would be raised in a joint home. The court did not apply an intent test, finding that K.M. s waiver did not affect the determination of parentage. Gestational Surrogacy and Same-Sex Couples In California, there is a strong public policy favoring a child having two parents rather than one. 20 The UPA extends equally to every child and to every parent, regardless of the marital status of the parents, 21 including to same-sex couples. 22 In Elisa B. v. Superior Court, in 1993, Elisa B. and Emily entered into a lesbian relationship. 23 They both decided they would like to give birth; 24 however, Elisa would be the provider of the family and Emily would be the stay-at-home mother. 25 In 1997, Elisa gave birth to Chance and, in 1998, Emily gave birth to Ry and Kaia. Elisa supported the household financially and treated all three children as her own. In 1999, they separated. 26 Subsequently, the county filed an action to establish that Elisa was obligated to pay child support to Emily, who was receiving public assistance. The California Supreme Court ruled that in parentage determination if a man or woman 1) receives the child into his or her home and 2) openly holds out the child as his or her natural child, then that man or woman is the natural parent. 27 By providing for the household financially, Elisa received Chance, Ry, and Kaia into her home, and by naming the children, breast-feeding them, and claiming all of them as dependents, Elisa held out the children as her own. 28 As Family Code Section 7611(d) states, the presumed parent receives the child into his or her home and openly holds out the child as his or her natural child. Furthermore, the California Supreme Court stated: One who consents to the production of a child cannot create a temporary relation to be assumed and disclaimed at will, but the arrangement must be of such a character as to impose an obligation of supporting those for whose existence he is directly responsible. 29 A similar point was made in Marriage of Buzzanca, a parentage by estoppel case in which a husband and wife made an agreement with another woman and her husband that the woman would carry a baby for them. 30 The husband and wife then separated before the baby was born, and the husband tried to get out of paying support but was found to be a parent by estoppel. Until more uniform statutes are passed, same-sex couples should thoroughly research and plan their futures before entering into a surrogacy agreement since the determination of how surrogacy is regulated depends on both the state and type of surrogacy chosen. While all states must now recognize samesex marriages, the legality of surrogacy is a separate issue, and not all states recognize surrogacy arrangements. The states that do not recognize surrogacy view it as a form of human trafficking and are guided by a moral imperative to stop the sale and purchase of babies. On the other hand, states recognizing surrogacy view it as equal to adoption. However, even in cases of adoption, samesex couples continue to encounter difficulties. In a recent case, V.L. v. E.L., the Supreme Court reversed an Alabama court s refusal to recognize a same-sex adoption. 31 V.L. and E.L. were a lesbian couple, and V.L. was granted joint custody in Georgia of three children to whom E.L. gave birth. The couple, who never married and have since separated, had established temporary residency in Georgia in order to secure adoption rights for V.L. Later, after the couple separated, an Alabama court refused to recognize the adoption, ruling that Georgia had mistakenly granted joint custody to V.L. Citing the U.S. Constitution, the Supreme Court has now reversed Alabama s unprecedented decision, ruling that Alabama must give full faith and credit to Georgia s decision. 32 Although progress is being made, there still remain issues for same-sex couples when it comes to adoption and surrogacy. The Center for American Progress (CAP) provides detailed information on each state s policies regarding surrogacy. 33 For instance, CAP explains that New York forbids surrogacy and will fine those entering into a surrogacy contract up to $10, Michigan also forbids surrogacy, with fines up to $50,000 and up to five years in prison. 35 Texas does permit surrogacy but requires judicial approval of surrogacy contracts. 36 Washington permits only uncompensated surrogacy contracts. 37 Accordingly, because the issue of samesex couples rights to have children through surrogacy has not been clearly resolved, they may want to consider choosing states favor- Los Angeles Lawyer July/August

16 able to both same-sex marriage and surrogacy. In addition, couples need to consider whether they want a traditional surrogacy or gestational surrogacy and whether they want judicial involvement in the agreement process. Legal Representation and Surrogacy Agreement Because California same-sex couples may have limited surrogacy options in other states or abroad, their best option may be to make a surrogacy arrangement in California. This ar - rangement would be governed by California surrogacy law Assembly Bill 1217, which Governor Jerry Brown signed into law in In addition, Section 7962 was added to the California Family Code. The surrogacy agreement must be statutorily compliant. For instance, Section 7962 states a surrogacy agreement must have: 1) the date on which the assisted reproduction agreement for gestational carriers was executed, 2) the persons from which the gametes originated, unless anonymously donated, 3) the identity of the intended parent or parents, and 4) disclosure of how intended parents will cover medical expenses of the gestational carrier and of the newborn or newborns. 38 Among other things, Section 7962 also requires that the agreement be notarized and that both the surrogate and intended parents be represented by independent counsel of their choosing. 39 A surrogacy agreement executed in accordance with Section 7962 is presumptively valid and may not be rescinded or re - voked without a court order. 40 On the other hand, failure to comply with Section 7962 shall rebut the presumption of validity. 41 Beyond complying with Section 7962, couples interested in gestational surrogacy should also include choice of law, choice of forum, and alternative dispute resolution provisions. Having such provisions will help resolve any disputes as quickly as possible, thereby mitigating potential risks to the surrogate child. It is also important to arrange that the su r rogate will agree to: requested physical and psychological exams; the minimum and maximum number of required attempts to achieve a pregnancy; not engage in intercourse during the attempts to achieve pregnancy; not terminate the pregnancy unless her own life is at risk; not smoke, drink, or use illicit drugs during the pregnancy; not claim physical or legal custody of the surrogate child by the surrogate and her husband, if any; the term that it is in the surrogate child s best interest to be raised by the intended parents; financial terms (including surrogate compensation, donor compensation, reimbursement, expenses, etc.); and other relevant terms depending on the particular circumstances. Breach A breach occurs when a contract obligation is not fulfilled or an express representation or warranty is untrue. Some examples of breach include: 1) termination of pregnancy without cause or consent, 2) refusal to submit to medical testing, 3) the genetic relationship of the surrogate child is not that of the in - tended parent(s), 4) failure of intended parents to pay, and 5) failure to comply with other material terms. This brings attention to an important question what will a court do if the surrogate refuses to give custody of the child to the intended parents or the intended parents refuse to take custody? To determine the outcome, a court will look at the state s surrogacy laws and the terms of the contract. In New Jersey, the Baby M case is still precedent in this particular situation. Custody of the surrogate child will depend on whether the surrogacy was traditional or gestational. If the surrogacy was traditional, the court will invalidate the surrogacy agreement and use the best interest of the child test to determine custody. If the surrogacy was gestational, the court usually will issue prebirth orders in favor of the intended parents. In Johnson v. Calvert, superior court Judge Richard Parslow found that the intended parents, the Calverts, were the genetic, biological and natural parents of the child. Judge Parslow also ruled that the surrogate, John - son, did not acquire parental rights over the child she carried. 42 In California, the intent of the parties is controlling. A statutorily compliant surrogacy agreement is presumptively valid and enforceable and may not be invalidated absent a court order. In the event of a breach, having a well-drafted surrogate agreement is critical to protection of one s family. With the advent of legal same-sex marriage, it is likely that same-sex couples increasingly will look towards surrogacy to build their families. However, the process is emotional, complicated, and expensive. In order to ensure a smooth process, couples should thoroughly consider the potential costs, including but not limited to medical and legal fees. Using a U.S.-based surrogacy agency may be more expensive but it allows the couple to deal with more certainty than having a surrogacy in foreign jurisdictions, particularly in light of the controversy that still surrounds same-sex marriage in some of those places. Finally, selecting and contracting with the right surrogate candidate is essential to ensure the surrogate child s health and to ensure that custody is properly delivered. Despite the attendant stress and complexities, many couples will still seek surrogacy 14 Los Angeles Lawyer July/August 2016

17 because it offers a more personal experience of bringing a child into this world. Couples should seek counsel for advice and guidance throughout the surrogacy process. Though the journey may be difficult, the destination is worth it. n 1 Obergefell v. Hodges, 135 S. Ct (2015). 2 See, e.g., Agency Fees & Surrogate Mother Costs, Fertil ity Source Companies, (last visited May 12, 2016); Janna Herron, The Costs of adoption vs. surrogacy, BANKRATE, (last visited May 12, 2016). 3 See, e.g., Cheaper Overseas: Surrogate Mothers, ABC NEWS, Sept. 28, 2007, available at Egg Donation and Surrogacy, New Hope Surrogacy in Ukraine, (last visited May 12, 2016); Darlena Cunha, The Hidden Costs of International Surrogacy, THE ATLANTIC (Dec. 22, 2014), available at 4 See, e.g., Edward Echwalu, From Uganda to Russia, Homophobia Spreading Worldwide, NEWSWEEK (Feb. 27, 2014), available at Supreme Court makes homosexuality a crime again, THE TIMES OF INDIA (Dec. 12, 2013), available at 5 MAGADALINA GUGUCHEVA, SURROGACY IN AMERICA, COUNCIL FOR RESPONSIBLE GENETICS 3 (2010), available at /pagedocuments/kaevej0a1m.pdf. 6 Matter of Baby M, 109 N.J. 396, 411 (1988). 7 Id. 8 Id. at Id. at Id. at Id. at See Johnson v. Calvert, 19 Cal. Rptr. 2d 494 (1993). 13 Id. at In re C.K.G., C.A.G., & C.L.G., 173 S.W. 3d 714, 714 (Tenn. 2005). 15 In re Marriage of Moschetta, 30 Cal. Rptr. 2d 893, 900 (1994). 16 Id., citing FAM. CODE 8814(a). 17 K.M. v. E.G., 37 Cal. 4th 130 (2005). 18 Id. at 137, citing K.M. v. E.G., 33 Cal. Rptr. 3d 61, 66 (2005). 19 K.M., 37 Cal. 4th Kristin H. v. Lisa R., 37 Cal. 4th 156, 166 (2005). 21 Elisa B. v. Superior Ct., 37 Cal. 4th 108, 116 (2005). 22 Id. 23 Id. 24 Id. 25 Id. at Id. 27 Id. at Id. 29 Id. at 124 (citing People v. Sorensen, 68 Cal. 2d 280, 285 (1968)). 30 Marriage of Buzzanca, 61 Cal. App.4th 1410 (1998). 31 V. L. v. E.L., 577 U. S. (2016). 32 Id. (citing U. S. CONST. art. IV, 1). 33 GUIDE TO STATE SURROGACY LAWS, CENTER FOR AMERICAN PROGRESS, available at (last visited May 11, 2016). 34 Id. See also N.Y. DOM. REL. LAW MICH. COMP. LAWS ,.857, TEX. FAM. CODE ANN WASH. REV. CODE FAM. CODE 7962(a). 39 Id. at 7962(b). 40 Id. 41 Id. 42 Johnson v. Calvert, 19 Cal. Rptr. 2d 494 (1993). Los Angeles Lawyer July/August

18 practice tips BY NATE DILGER AND JOHN LORD Evaluating the Effectiveness of the Inter Partes Review Process WHEN INTER PARTES REVIEW (IPR) PROCEEDINGS were first introduced with the 2012 America Invents Act (AIA), 1 they were welcomed as an important addition to the patent system. Prior to IPR, potential infringers could only challenge a patent s validity through federal court litigation or reexamination. Litigation required substantial time and costs, and reexamination proceedings often lasted over two years with no ability to conclude even if the parties settled. Given these significant shortcomings, Congress created IPR as a more efficient and cost-effective way for potential infringers to challenge a patent s validity. Now, it is possible to challenge a patent s validity before the Patent Trial & Appeal Board (PTAB) far more quickly and cheaply than through litigation. IPR proceedings, however, are subject to several important limitations. For instance, they are limited to grounds that may be raised under Section 102 or 103, 2 and only based on prior art consisting of patents or printed publications, i.e., the PTAB will not consider prior use or prior sales of the invention, among others, as a basis for invalidating the patent. After receiving a petition for IPR from the petitioner or a preliminary response from the patent owner the PTAB will determine whether the petitioner has shown a reasonable likelihood of prevailing with respect to at least one claim challenged. 3 If so, the PTAB will initiate a trial and, if the proceeding is not dismissed (for example, if the parties settle), the PTAB will issue a final determination regarding the patentability of the challenged claims within one year. Since the introduction of IPR proceedings, large companies for example, Google, Samsung, Apple, Microsoft, and LG Electronics have embraced IPR proceedings. 4 Nonpracticing Entities (NPEs), a euphemism for patent trolls, have been a frequent target of these proceedings, with familiar names like Intellectual Ventures, Innovative Display Technologies, and Acacia showing up in the top-10 list for The first wave of IPR proceedings saw most action occurring once the PTAB had granted the petition and initiated trial. Many patent owners did not even file a preliminary response to the challenger s petition, likely because they were unfamiliar with the process, did not want to tip their hand too early in the process, and/or were attempting to minimize fees and expenses. 6 Even when patent owners prepared a preliminary response, these responses rarely convinced the PTAB to deny the challenger s petition. Indeed, in 2013 patent owners achieved a dismal success rate, with the PTAB granting 86 percent of IPR petitions. 7 Recently, though, Patent Office statistics have shown a steady decline in the PTAB s rate of granting IPR petitions. By 2014, the rate had dropped 12 percent to approximately 74 percent and then dropped again in 2015 to approximately 65 percent. 8 Understanding the reasons for this decline, however, has been far from a simple task. Some practitioners have suggested that political forces may be in play. At the October 2013 annual meeting of the American Intellectual Property Law Association, then Federal Circuit Chief Judge Randall Rader famously referred to the PTAB as death squads killing property rights. This characterization did not go unnoticed by the PTAB, when Chief Judge James Donald Smith, attempting to defuse the situation, responded: I personally do not believe if by death squad you mean there s an intention to find claims unpatentable. Absolutely not. The board approaches its decisions in a very neutral manner. 9 The PTAB has not outwardly given any sign that the views of Judge Rader, which seem to echo that of many practitioners, have played a role in the increased success seen by patent owners. 10 But the numbers certainly suggest the PTAB may be taking a more balanced approach to IPR petitions. A more tangible reason patent owners are having greater success defeating institution decisions is their increased willingness to bring the fight earlier in the process. Patent owners are filing preliminary responses at a rate that has slowly crept up as the IPR process has matured. In 2014, approximately 80 percent of patent owners filed a preliminary response to the IPR petition. 11 That number increased to 85.6 percent in 2015 and 83.8 percent in the first part of While the incidence of preliminary responses has certainly increased, that number alone does not adequately explain the PTAB s declining initiation rate. For example, while the patent challenger s success rate between 2014 and 2015 dropped 14 percent, the numbers show only a modest seven percent increase in patent owners who chose to file a preliminary response challenging the initial petition. 13 The decrease in granted petitions may also be tied to the type of patents now being challenged, in particular, the overall strength of those patents. The early IPR petitions appeared to focus on the weak - est patents, a point that Judge Smith noted during a 2014 meeting of the U.S. Patent and Trademark Office s Patent Public Advisory Com - mittee. Indeed the stated goal of the AIA was to give the Patent Office a toolbox of new proceedings to weed out low quality patents includ[ing] post-grant review, IPR, supplemental examination, and derivation proceedings, as well as a transitional post-grant review program for certain business methods patents. 14 Although the success rate of patent challengers has remained high at least at trial challengers have been emboldened to utilize the process, resulting in an increased number of IPR petitions and, according to many practitioners, a higher caliber of patents being challenged. 15 For instance, patent office statistics show that the number of filed IPR petitions more than doubled between 2013 and 2014 and has remained relatively steady since then, evidencing that patent challengers have embraced the PTAB s IPR procedures as a desired alternative to district court litigation. The PTAB has become the largest venue for patent disputes, with 461 petitions filed in the first quarter of 2016, compared with 288 filings in the same period for its nearest competitor, the Eastern Nate Dilger and John Lord are registered patent attorneys and partners at One LLP. Mr. Dilger s practice focuses on litigating patent disputes, including representation of patent challengers and owners in PTAB inter partes review proceedings. Mr. Lord s practice focuses on intellectual property litigation, including representation of companies in postgrant PTAB proceedings. 16 Los Angeles Lawyer July/August 2016

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